I guess killing the Union movement, well paying jobs and moving our manufacturing base off shore to “developing countries” (brought to you by the the Reagan Revolution, “Free Market” Proponents and Big Business) isn’t just a matter of trickle down economics, income inequality, lost jobs, globalization and the Great Recession. According to testimony before Congress it is also a major threat to our nation’s national security.
What kind of threat? The kind where we can’t produce critical components for the weapons our military uses, for example:
“We have allowed our industrial base to deteriorate for the last two to three decades. As a result, just in national defense terms, our supply lines for strategic parts and materials have been stretched around the world,” said Jeff Faux, founding president and distinguished fellow of the Economic Policy Institute. […]
America’s economic policies over the last the decades have been an EPIC FAIL according to the AFL-CIO because our country has lost the manufacturing base to protect our country:
“As you watch globalization move the manufacturing base offshore, in essence you are moving the defense base offshore,” said Robert Baugh, executive director of the AFL-CIO, “This is dangerous.”
We don’t even have the industrial capacity to build ships or make enough bullets for the troops:
We have already lost our lead in some critical defense-related industries such as semiconductors, printed circuit boards, machine tools, advanced materials and aerospace, Baugh said. The closure of the Avondale and Ingalls shipyards would cripple our ability to make ships.
Michael Wessel, a member of the US-China Economic and Security Review Commission, told the panel the situation is so bad that we no longer have the domestic capacity to produce enough ammunition to supply our troops and law enforcement. There are waiting lists to fill the police departments here at home, he said.
So who is reaping the benefits of an economic policy that eliminated much of our critical manufacturing base and diminished the ability of America to supply the military? Why our “good friend” China:
The nation’s manufacturers are being seduced by China where they can get more for their money due to an undervaluation of their currency, illegal subsidies, and a lack of enforceable laws regarding, worker rights, and environmental and health standards, Baugh told CNN.
China’s manufacturing sector is on the brink of passing that of the United States, according to a report released in June by the economic research firm IHS Global Insight. The value of goods produced by China’s factories reached about $1.6 trillion last year, compared to $1.7 trillion by U.S. manufacturers.
Who were the biggest supporters of “globalization” “free markets” and outsourcing of American manufacturing jobs overseas? Conservatives and Republicans. Yes they had the willing assistance of Bill Clinton and the Democratic Leadership Council to pass NAFTA, but the main cause for the loss of our manufacturing base can be laid at the feet of the Reagan Revolution and the policies he and the Conservative Movement promoted:
[W]hile the trend toward concentration of capital ownership and control was already underway prior to Reagan, the economic policies of Reaganomics opened the flood gates instead of strengthening the dam, leading to an even more dramatic rise in capital concentration over the past 30 years than would have otherwise been the case. … This helped pave the way for the massive off-shoring of American industry in the 1990s, during the time of cheap fuel, cheap borrowing, and institutional investors who were cozy and comfortable with executives but not workers, who pushed executives to take actions that would lead to greater market volatility and short-term gains, both of which were beneficial to “investment” institutions, while they are not particularly healthy for long-term economic stability and growth.
… Indeed the system of incentives that emerged from the Reaganomic agenda is one that has driven the country into a downward economic spiral as those driving the economy into the ground benefit from its destruction.
One of the biggest economic ironies of the past 30 years has been the belief among conservatives, famously voiced by Reagan, that “government is the problem”, and the claim that government spending inhibits economic growth, when in fact two of the technologies that contributed the most to real economic growth in America over the past 30 years were developed by the government: the internet and satellite technologies. […]
The reality is that the demise of the America economy began some 30 years ago. The seeming decent functioning of the economy these past 30 years has been an illusion propped up by public and private debt, and basically by riding on the solid base that was built in this country during the 1940s-1960s. The solid economic base that was built during that time, both in terms of the middle-class itself and in terms of infrastructure and institutions was so strong and so well built that it was able to carry the country for several decades even as it was being weakened. The policies of the Reaganomic agenda reduced investment in the nation’s infrastructure, reduced investment in education, reduced investment in long-term research and development, and instead squandered resources on grossly over-funded military spending and on privatization schemes that resulted not in the shrinking of the size of government nor in the improvement of government services, but rather in the development of a private sector with a profit motive to continuously get its hands on more and more tax payer money.
The presidency of George W. Bush, the GOP’s dominance of Congress and their corporate friendly policies of lower taxes, promotion of globalization and lax regulation only accelerated the loss of American manufacturing jobs and factories. When we should have been re-investing in our industrial sector and promoting policies to strengthen and increase the dwindling middle class and eliminate income inequality, instead we went on binge that benefited Wall Street’s greed at the expense of the manufacturing sector which had created the middle class lifestyle under which so many Americans had prospered prior to Republican and conservative dominance of economic policy after 1980.
Something has gone radically wrong with the American economy. A once-robust system of “traditional engineering” — the invention, design, and manufacture of products — has been replaced by financial engineering. Without a vibrant manufacturing sector, Wall Street created money it did not have and Americans spent money they did not have. […]
America’s economic elite has long argued that the country does not need an industrial base. The economies in states such as California and Michigan that have lost their industrial base, however, belie that claim. Without an industrial base, an increase in consumer spending, which pulled the country out of past recessions, will not put Americans back to work. Without an industrial base, the nation’s trade deficit will continue to grow. Without an industrial base, there will be no economic ladder for a generation of immigrants, stranded in low-paying service-sector jobs. Without an industrial base, the United States will be increasingly dependent on foreign manufacturers even for its key military technology.
For American manufacturers, the bad years didn’t begin with the banking crisis of 2008. Indeed, the U.S. manufacturing sector never emerged from the 2001 recession, which coincided with China’s entry into the World Trade Organization. Since 2001, the country has lost 42,400 factories, including 36 percent of factories that employ more than 1,000 workers (which declined from 1,479 to 947), and 38 percent of factories that employ between 500 and 999 employees (from 3,198 to 1,972). An additional 90,000 manufacturing companies are now at risk of going out of business.
Long before the banking collapse of 2008, such important U.S. industries as machine tools, consumer electronics, auto parts, appliances, furniture, telecommunications equipment, and many others that had once dominated the global marketplace suffered their own economic collapse. Manufacturing employment dropped to 11.7 million in October 2009, a loss of 5.5 million or 32 percent of all manufacturing jobs since October 2000. The last time fewer than 12 million people worked in the manufacturing sector was in 1941. In October 2009, more people were officially unemployed (15.7 million) than were working in manufacturing. […]
The U.S. machine-tool industry — the industry that’s the backbone of an industrial economy and the means by which all products are manufactured — produced $4.2 billion in equipment in 2008, a paltry 5.1 percent of global output. American machine-tool consumption has collapsed in tandem with American manufacturing. Since 1998, U.S. machine-tool consumption has fallen by 23 percent. Chinese consumption has increased by 714 percent, from $2.7 billion in 1998 to $19.3 billion in 2008. U.S. consumption stood at $6.7 billion in 2008. For the eight months ending in August 2009, U.S. machine-tool consumption declined to only $1.04 billion. The evaporation of orders, says Mike Austin, vice president of Atlas Technologies in Fenton, Michigan, “is the last straw for many people in this industry.”
Machine tools have long been considered essential to maintaining the country’s national security. In 1948, Congress passed the National Industrial Reserve Act based on the idea that the “defense of the U.S. requires a national reserve of machine tools for the production of critical items of defense material.”
Yet what do Republicans promise us if the regain power? Will they do anything to reverse these trends? Not likely. All they have is empty rhetoric about the evils of government, and the “tyranny” of President Obama and the Democrats. They tout the same tired formula of deregulation of big business, deficit reduction and tax cuts something we know has not worked in the past based on the record of increasing deficits created by the Reagan/Bush I and Bush II administrations:
That is the track record of the Republicans when they have been in power: massively increased deficits, Wall Street Bankers out of Control, lost jobs, ever widening income inequality so that the profits from collective efforts of all Americans are funneled increasingly to the richest Americans and the destruction of our manufacturing base and our technological and innovative prowess.
That and unnecessary wars that sap our military, spread ill will across the globe, kill thousands. In short, Republican and conservative economic and foreign policies have make us ever more reliant on foreign powers for our energy needs (Saudi Arabia anyone), financing our debt and providing the manufactured goods we buy and, more importantly need to supply our armed forces (e.g., China).
So, who is the greatest threat to our national security? I think you know the answer to that question by now: it’s the elephant in the room.